TRANSMISSION OF RATE CUT KEY TO BOOST HOUSING DEMAND
pessimistic viewduetocontinued downward revision in gross domesticproduct(GDP) estimate and new stress in the banking system.
Top laggards in the Sensex packincludedKotakBank, ICICI Bank, HDFCBank, Tata Motors, Larsen & Toubro, State Bank of India, Tata Steel and Axis Bank, which dropped up to 3.46%.
On the other hand, Tata Consultancy Services, Infosys, ONGC, TechMahindra, IndusInd BankandNTPCroseupto1.03%.
Rate-sensitive bankingstocks faced the heat, with the BSE bankex, finance, auto and realty indices tanking up to 2.45%.
Broader BSE MidCap and SmallCap indices followed Sensex, shedding up to 0.94%.
Overall market breadth was negative with 1,636 scrips ending with losses and 976 posting gains onBSE. Asmanyas256stockshit their 52-weeklowlevelswhile346 scrips hit the lower circuits. NEW DELHI: The Reserve Bank of India’s (RBI’s) decision to cut key policy rate by25 basis points will boost consumer sentiment as well as housing sales during the festive season which is a crucial period for realty sector, property consultants said on Friday.
However, they said the RBI shouldensureeffectivetransmission of rate cuts, announced on Friday as well as earlier, to home loanborrowers.“Consumersare spendinglessoneverythingfrom FMCG to automobiles—and, of course, real estate. Naturally, the sector eyes the RBI’s monetary policy for cuts in the key lending rates to support various measures taken bytheCentreto boost consumption sentiment,” Anarock chairman Anuj Puri said.
The move would go some way in improving consumer sentimentinthefestive season, which is a crucial period for real estate sales, he added.
“However, much depends on how efficiently banks transmit the benefits to their homebuying borrowers,” Puri said.
CBRE India chairman and chief executive officer (CEO) Anshuman Magazine said, “The timing of the cut is crucial as it is expected to spur real estate demand and consumption in the festive season as it is an important period for investment/consumption across sectors.” It is nowcritical that banks facilitate afastertransmissionoftheserate cuts to ensure that the measures reap results, he added.
JLL India CEO and country head Ramesh Nair said the real estate sector is likely to witness accelerated sales owing to favourable policy reforms and the gradual transmission of rate cuts to end-consumers through lowering of mortgage rates.